In recent weeks, I was reminded of the old adage be careful of the company you keep as news broke about companies pulling their advertising and sponsorship from a national radio show after the presenter came under the spotlight for comments he made about rape.
While the focus of attention in this particular scenario was of a more ethical nature, it got me thinking about the broader concept of partnership as it applies to the modern business world and the potential for negative blowback if one or more parties falls short of expectations.
Business partnerships have existed since the dawn of time. But, like so many other things in our digitised, globalised world the amount and types of partnerships has broadened significantly. Outsourcing has become the norm, with companies’ “non-core” functions being run by internal (in the case of shared services) or external parties. Digital disruption means many companies are buying-in outside expertise and diversification is leading to brands coming together to leverage each other’s strengths (think concession counters within convenience stores). Even traditional arch rivals are putting aside their differences in the pursuit of mutual benefit in a relatively new concept referred to as coopetition.
Strategic alliance. Joint venture. Client relationship. Sponsorship. Coopetition. Whatever the precise definition of the partnership between two or more parties, the point holds that you need to think carefully about who you chose to “do business” with.
A successful partnership is contingent on so many factors, such as being aligned in your objectives and standards, being confident that others will deliver on your behalf, being able to entrust important information to third parties and of course being able to resolve differences of opinion.
Safeguarding your own reputation
Of course, there are all the usual checks and balances that should be in place, like a clear strategy and plan for the partnership, as along with numerous policies including on data privacy, codes of conduct, governance, ethics and so on. But, insofar as is possible, some companies are now going a step further by doing their homework on their potential partner’s reputational standing as well.
For example, how would your partners fare when considering the following:
- Do they have a reputation strategy and governance framework in place?
- What do they say are the values that guide their behaviours and how closely is their moral compass aligned with your own?
- Do they have a robust corporate governance balance with strict checks and balances in place?
- Have they had any negative publicity in the past? What for, and is there any negative residue?
- What is their reputation capital in the event of an issue or crisis? (In other words, how quickly could they recover, if at all?)
- Would your competitors and peers be willing to collaborate with them? Is your partnership exclusive and if not, what are the potential reputational risks related to this?
- How do relevant stakeholders perceive this company (and you for that matter!)?
A company’s reputation is its greatest asset so it’s important not to run the risk of another party putting that in jeopardy. One way you can get assurances in this regard is to undertake an audit of your potential partner’s reputation, to explore some of the questions above.
In fact, we were recently contracted by a company to vet the reputation of a potential partner. Why? Because they wanted to test any weak spots of this company’s reputation and get assurances about how it was perceived in the marketplace to avoid any potential negative impact on their own reputation down the track.
If disaster strikes
There are countless examples of partnerships going wrong: a service provider fails to deliver, leaving the company who owns the primary relationship with the customer to pick up the pieces (e.g. a data breach); one party decides they want to go in a different direction; there is an irreconcilable difference of opinion ending in a bitter public spat; or indeed, an unintentional cock-up.
In the event of a partnership that turns sour, it is important to act quickly to mitigate the fallout commercially and reputationally. Think treat or terminate. Can the problem be rectified and time allowed for parties to reconcile your differences?
Or is it the case that you need to distance yourself quickly and definitively, as was the decision of the sponsors in the aforementioned radio show?
Working with others can be very fulfilling and it’s the modern day approach to growth and success but it’s important to remember that it’s better to keep company with those that lift you higher…